Leontief
Production
Model
Janet
Aquino,
Jonathan
Guzman,
Szuhara
Jen
MATH
247Dr.
Jen-Mei
Chang
Leontiefs
Question
In
the
1930s,
economist
Wassily
LeonJef
divided
the
economy
into
500
sectors,
wriJng
linear
equaJons
that
described
how
each
sector
distributed
its
output
to
other
sectors.
By
creaJng
this
system
of
linear
equaJons,
he
created
a
500
by
500
matrix
and
began
developing
the
Leon%ef
Input-Output
(or
Produc%on)
Model.
By
creaJng
this
model,
LeonJef
aTempted
to
answer
the
following
quesJon:
Is
there
a
produc%on
vector
(also
known
as
the
producJon
level),
x,
that
equals
the
total
demand
for
producJon
in
an
economy?
In
other
words,
is
there
an
x
such
that
x = i+d
where
i
=
(intermediate
demand),
and
d
=
(external
demand)
There
are
two
variaJons
of
this
modela
closed
and
an
open
model.
This
presentaJon
will
deal
with
the
open
model
with
an
iniJal
d.